 Choosing
the Right Loan
Purchasing a home is one of the biggest
decisions and largest expenditures
anyone will ever have to make. Choosing
the right home loan can save you
thousands over the lifetime of your
loan so it’s important that you’re well
informed of your options before entering
into any agreement. There are a number
of different options available so it
can be difficult to decide what is best
for you. Below we’ve provided a list of
questions that can help in this
important decision making process.
How long do you plan to occupy this
property?
If you’re only planning to stay in your
new home for a few years, an Adjustable
Rate Mortgage might be the right
decision for you. This type of loan
allows you to enter at a lower interest
rate, but the rate adjusts at fixed
intervals throughout the life of the
loan. This is an excellent option
for people who don’t plan to stay in the
home for more than about 3 years.
If you plan to stay in your property
long-term, a Balloon Loan or a Fixed Rate
Mortgage might be a better decision.
Do you prefer lower payments, or a
more rapid accumulation of equity?
If you’re trying to build equity
quickly, a 15 to 20 year fixed rate
mortgage is probably the best option to
consider. To minimize your payment, you
can apply for a longer, 30 year loan, or
an ARM loan.
 Where
do you feel interest rates will be in
the future?
If you think interest rates are going to
rise in the future, it might be a good
idea to choose a Fixed Rate Mortgage to
protect yourself. If you expect interest
rates to fall or stay the same, you could take advantage
of the low rates with an Adjustable Rate
Mortgage.
Are you comfortable with risk?
While you can make educated guesses as
to how the market will perform in the
future, nothing is certain. No one can
predict with absolute certainty what
interest rates will do in the future. If
you want to minimize your risk, a fixed
rate loan is probably the best option
for you. If you’re comfortable with
market changes, you might be able to
take advantage of fluctuations by
choosing an ARM loan or a balloon loan.
Paul Loveless is an exclusive Shenandoah
Valley Real Estate Agent for Buyers, and
we’re happy to help with any Frederick
County VA Real Estate questions. We can
even make some recommendations on how to
find the best mortgage for you. Give us
a call today!
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If you have any questions or would like
more information, please call us at
540.955.0730 or send an email to
paul@paulloveless.com.
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